After #SURE, what will happen to Europe’s self-employed?

| April 29, 2020

The Support and Mitigate Unemployment Risks in an Emergency (SURE) initiative, which was recently approved by the European Council, is a powerful tool that enables the EU to shield all workers, including the self-employed, from the coronavirus economic slowdown. After the dust settles down, however, it is important that national governments remember the particular struggles of the self-employed, gig workers and freelancers and take concrete steps to reassess the gaps in their social security systems, writes Mihai Palimariciuc.

Under the new SURE instrument, the Commission will borrow money on the financial markets, which it will then loan to member states. In turn, national governments will create or extend short-time work schemes to shield employees against the risk of unemployment and, crucially, fund similar income replacement schemes for the self-employed, who make up 14% of the workforce in Europe.

European welfare systems were designed at a time when full-time, open-ended contracts were the norm, and other working arrangements were exceptional. That reality is changing fast, and the system is slow to correct. In fact, between 2002 and 2018, the total number of self-employed grew by 4%, and the number of self-employed workers without employees grew by 13%.

The current crisis has exposed the inherent disparity between ‘typical’ workers and the growing cohorts of freelancers and gig workers. Self-employed workers are more likely to be exposed to income poverty, and are less protected against social and economic risks (to varying degrees depending on their country of origin and the social protection systems in place there).

The European Union has already tried to address the issue, putting in place recommendations that seek to ensure that all workers are given adequate access to social security. However, in many countries, that access is still conditional on whether or not you’re employed, how much you earn and how long you’ve contributed to a country’s social welfare system.

In Italy, for example, one of the hardest-hit countries, self-employed workers, who represent more than 20% of the workforce, remain less protected than traditional workers. They are excluded from the general unemployment and sickness schemes, and even when alternative schemes are available, not all require paying social contribution. Some even allow you to opt-out of the system which, in effect, decreases the number of people protected and the efficiency of the available safety net. Because of this, Italy has one of the highest numbers of workers who are at risk of not receiving social benefits.

Unfortunately, Italy is not the only country with patchy social protection systems. All over Europe, the self-employed are falling through the cracks, excluded from certain protection schemes or obligations to be insured. This gap, coupled with the financial pressure of the current crisis, highlights both the need for social protection and the inequality of the current system.

It is therefore unfortunate that SURE will only serve as temporary relief for the self-employed. Effective safety nets should not exclude certain categories of workers. By including the self-employed and freelancers in the scheme, SURE could serve as an important steppingstone for member states to reassess their welfare systems.

Some countries, in their attempt to battle the pandemic, have already started the process of re-evaluate their social protection systems and decided to extend or increase the generosity of schemes designed for the self-employed. One example is Ireland, where the government has relaxed the application requirements for people to claim sickness benefits. Under these new rules, the self-employed and those working in the platform economy will be protected against income loss.

It is important to keep in mind that while this particular crisis is extraordinary, the problems it unveiled will continue to be there once it’s over. After the pandemic, workers will continue to be affected by the loss of income and illness. When the support schemes now put in place cease to operate, what will happen to those who don’t have a standard employment contract and find themselves caught outside the welfare state’s safety net?

Uncertainty, adversity and bad luck will always be a part of life. Hopefully, European governments will take the lessons of this crisis to heart. They should realize that social welfare shouldn’t solely be a privilege for those with the ‘right’ kind of contract. With political commitment, access to social security for the self-employed and platform workers can be further extended and significantly improved, so that they’ll better protected against the next crisis that comes along


Facebook comments

Tags: , , , ,

Category: A Frontpage, coronavirus, COVID-19, Economy, Employment, EU, EU, Health

Comments are closed.

Left Menu Icon